Brian Lenihan Jnr (Dublin West, Fianna Fail)

The taxation of individuals in the State is in line with that prevailing in most other OECD jurisdictions, that is, individuals who are resident in the State for tax purposes, based on the number of days of presence in the State, are taxable here on their worldwide income; and individuals who are not resident here for tax purposes pay tax here only on income arising in the State and on income derived from working here. In section 15 of the Finance (No. 2) Act 2008, I amended the tax residence rules to provide that an individual will be regarded as present in the State for a day if he or she is in the State at any time during the day, not just at midnight. This applies for the 2009 tax year and subsequent tax years. It makes it more difficult for individuals based in Ireland to become non-resident for tax purposes. I remind the Deputy that, as outlined above, such persons pay tax on any income earned in Ireland.

I am aware that HM Revenue and Customs introduced changes to the remittance basis of taxation, under which certain individuals pay tax on foreign income or gains only if the money is remitted or brought into the country. The charge to which the Deputy refers is not imposed on non-residents. It is levied on UK residents who are either not ordinarily resident or not domiciled in the UK and who therefore can claim the remittance basis. These individuals now must pay a fee of £30,000 in order to claim the remittance basis and avoid paying tax on foreign income and gains unless this money is remitted to the UK. I am not considering implementing such a measure at this time.

The Deputy might ask whether I intend to impose a charge on individuals who become non-resident for tax purposes. There is no requirement on an individual leaving the State to declare, whether on a tax return or elsewhere, the reason he or she left Ireland, so there is no way to identify someone who has left for tax purposes. Individuals are perfectly entitled to change their residence and they do so for a variety of reasons, most of which have nothing to do with tax.

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